Wall Street ends higher as investors buy AI stocks; Microsoft rallies

New York - Wall Street closed higher on September 25, propelled by gains in Microsoft and other technology stocks tied to artificial intelligence (AI), while high oil prices and an uptick in United States Treasury yields kept investors cautious. The S&P 500 and Nasdaq indexes both finished the day on an upward trend, following a week marked by uncertainty surrounding which sectors would thrive or falter due to AI advancements, geopolitical tensions, and rising Treasury yields.

Microsoft experienced a 3.7 percent increase, boosting its 2026 gain to 7 percent, following the announcement of new features for its Copilot app, such as a coding tool and an AI agent that operates continuously. Semiconductor manufacturer Qualcomm and Dell Technologies also saw increases of 4 percent and 5 percent, respectively.

Akamai Technologies surged by 3.2 percent after signing a $11.6 billion cloud services agreement with AI pioneer Anthropic, which includes a warrant that could potentially grant Anthropic a 5 percent stake in Akamai. According to Thomas Martin, a portfolio manager at Globalt Investments in Atlanta, this deal is a positive sign, indicating continued investment and deal-making activity, though it's a circular deal.

Meta Platforms, on the other hand, fell by 3.3 percent. The company's stock saw a 13 percent increase this week due to positive feedback on its Muse AI agent, which analysts believe could benefit technology infrastructure companies, challenge traditional businesses like banks, and impact online shopping platforms.

The S&P 500 climbed 0.51 percent to end the session at 7,743.41 points, while the Nasdaq gained 0.48 percent to 27,068.72 points. The Dow Jones Industrial Average rose 0.93 percent to 51,828.62 points. Of the 11 S&P 500 sector indexes, seven saw gains, led by the information technology sector, which rose by 0.91 percent, followed by a 0.6 percent increase in the industrials sector.

The S&P 500 increased 1.2 percent for the week, while the Nasdaq rose 2 percent for the week after reaching a record high on September 22. The S&P 500 has been trading near 19 times expected earnings, the lowest valuation since 2023, according to LSEG data. AI-related heavyweights have made significant contributions to the recent rise in earnings expectations.

Reports of ongoing negotiations between US and Iranian negotiators aimed at resolving the conflict, which could involve Tehran reopening the Strait of Hormuz and Washington lifting its economic sanctions, contributed to improved market sentiment. Additionally, strong AI-related capital expenditures led to higher demand for critical manufactured capital goods, surpassing expectations in August.

Brent crude oil prices remained above $100 a barrel, while the yield on the benchmark US 10-year Treasury note hit its highest level in 19 years and was up 3.4 basis points at 5.196 percent. Traders estimate a 66 percent chance of the Federal Reserve raising interest rates by at least 25 basis points in October, up from around 50 percent earlier in the week, according to the CME Group’s FedWatch Tool.

On a lighter note, US President Donald Trump claimed to have had a "very productive meeting" with President Xi Jinping following a three-day summit that focused more on personal diplomacy than significant economic breakthroughs. Magazine publisher People Inc. experienced an 11 percent increase after a report suggested MGM Resorts International was considering a bid for the company.

During the trading session, advancing issues outnumbered falling ones in the S&P 500 by a ratio of 1.9 to 1. The S&P 500 recorded three new highs and 31 new lows, while the Nasdaq had 54 new highs and 175 new lows.